NAS-IT welcomes budget measures for Nepal’s IT sector, Calls for further reforms to boost global competitiveness

KATHMANDU: The Nepal Association for Software and IT Services Companies (NAS-IT) has welcomed a series of policy measures announced in the Fiscal Year 2083/84 budget, describing them as important steps toward positioning information technology as a key pillar of Nepal’s economic transformation.

In a post-budget statement, NAS-IT said the government’s decision to introduce tax incentives for IT service exports, improve tax provisions related to sweat equity for technology professionals, reduce the maximum personal income tax rate for professionals from 39 percent to 29 percent, streamline VAT refund procedures, expand Double Taxation Avoidance Agreements (DTAA), and promote artificial intelligence, innovation, and the digital economy would provide significant momentum to Nepal’s growing technology industry.

The industry body expressed appreciation to the Government of Nepal, the Ministry of Finance, and other relevant agencies for incorporating several recommendations submitted by the private sector during the pre-budget consultation process.

According to NAS-IT, the measures are expected to support the growth of Nepal’s IT exports, increase foreign exchange earnings, create high-quality jobs, and strengthen the country’s position as an emerging global destination for digital services.

However, the association noted that several important policy and structural reforms proposed by the industry were not included in this year’s budget. These include a long-term tax stability framework for the IT industry, a special 1 percent income tax regime for a fixed period, export incentive credits, preferential treatment for domestic software companies in government procurement and system development projects, the establishment of a National IT Promotion Board, and targeted international market promotion programs.

NAS-IT also emphasized the need for specific policies to support Software-as-a-Service (SaaS), cloud computing, and product-based technology companies. The organization argued that such reforms are essential to create hundreds of thousands of high-paying technology jobs, expand Nepal’s digital exports, and establish the country as a regional technology hub.

The association described the proposed 1 percent income tax regime not merely as a tax concession but as a strategic policy tool to improve Nepal’s international competitiveness. It noted that competing IT destinations such as the Philippines, Pakistan, Bangladesh, Kazakhstan, and Vietnam have already introduced attractive tax and policy incentives to attract technology investment and global clients.

NAS-IT urged policymakers to adopt internationally competitive and investment-friendly policies to achieve Nepal’s long-term digital economy objectives and establish the country as a globally recognized IT destination.

The association further pointed out that several technology-sector commitments included in the government’s 100-point program and national policy commitments were not reflected in the current budget. It expressed hope that these measures would be prioritized through future policies, programs, and implementation frameworks.

Looking ahead, NAS-IT said Nepal’s IT industry has the potential to become one of the country’s largest export sectors over the next decade, generating billions of rupees in foreign exchange earnings and creating hundreds of thousands of high-value jobs within the country.

The organization pledged to continue working closely with the government to help position Nepal as a leading digital and IT services center in South Asia while supporting the creation of a vibrant technology-driven economy.

NAS-IT also expressed confidence that the positive provisions included in the budget would be implemented effectively and welcomed the government’s commitment to allocating resources aimed at developing Nepal into a world-class technology hub.